|HUD No. 00-285|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||Friday|
|Or contact your local HUD office||October 6, 2000|
FHA COMMISSIONER ANNOUNCES RECORD RETURN ON SALE OF SINGLE FAMILY LOANS
WASHINGTON Housing and Urban Development Assistant Secretary for Housing/Federal Housing Commissioner William Apgar today announced the record-setting results of the Federal Housing Administration's (FHA) highly successful sale of single family loans to the private sector.
On September 22, 2000, FHA auctioned 8,053 single family loans (SFLS 2000-1), with an unpaid principal balance totaling $480,868,067. The sale generated gross proceeds in excess of $467 million, or 97.2% percent of the unpaid principal balance of the mortgage loans. Market participation was very strong as evidenced by the fact that the return is the highest generated to date in the agency's mortgage auctions.
Salomon Brothers Realty Corporation was the sole winning bidder of the portfolio. Bidders were permitted to submit bids on individual blocks of mortgages as well as combinations of mortgage blocks. FHA determined the bid or bid combinations that provided the maximum return to the taxpayers.
"We couldn't be more pleased with this sale," said Apgar. "FHA's mortgage sales have produced over $2.25 billion dollars in budget profits since 1994. These funds continue our housing and neighborhood initiatives and help reduce the deficit. The sales also reduce the burden on HUD administrative personnel, allowing them to concentrate on expanding homeownership and protecting the health of our $400 billion mortgage insurance portfolio."
FHA, which is part of HUD, has a wide variety of insurance programs for single family, multifamily and health care facility mortgages. Last year, it insured a record 1.3 million mortgages worth $125 billion. FHA now insures a total of about 6.7 million mortgages for homes located across the country. Through the years, it has unlocked the door to homeownership for 30 million American families, many of them minorities and low or moderate income people.
The success of this sale is attributed to the team efforts of the FHA's newly established Asset Sales Office, which is staffed by Karen L. Williams and Mary Joyce Smith. Both are on detail from the Federal Deposit Insurance Corporation's Franchise and Asset Marketing Department with extensive experience in asset sales. Ms. Williams is in charge of the sales office. Ms. Smith was responsible for the coordination of the public and private sector teams involved in the sale.
Three private sector firms assisted HUD in this sales effort. Myerberg & Company, L.P., a New York based investment banking firm, was the Transaction Specialist responsible for the marketing and sale of the portfolio. Gardiner, Kamya & Associates, P.C., a management consulting and certified public accounting firm located in Washington, D.C. provided Due Diligence service. Federal Asset Advisory Company, LLC., Program Financial Advisor, a joint venture real estate investment banking firm with offices in New York and New Jersey provided program oversight.
The Multifamily & Healthcare Loan Sale is scheduled for November.